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27. Provisions
Environmental remediation
The Company makes provisions for environmental cleanup
requirements, largely resulting from historical solid and
hazardous waste handling and disposal practices at its
facilities. Environmental remediation provisions exist at
the following sites and are discounted according to the
timeline of expected payments:
Cambridge, OH USA
The largest issues at the Cambridge, Ohio site relate
to a 1997 permanent injunction consent order (“PICO”)
entered into with the State of Ohio and Cyprus Foote
Mineral Company, the former owner of the site. While
AMG’s US subsidiary and Cyprus Foote are jointly liable,
the Company has agreed to perform and be liable for the
remedial obligations. The site contains two on-site slag
piles that are the result of many years of production.
Under the PICO, these slag piles were required to be
capped, thereby lowering the radioactive emissions from
the piles.
Remediation plans were finalized with the State of Ohio
during 2003 and the Company completed all work for this
remediation in 2009. In addition to the capital spending
required for the actual cap on the slag piles, the Company
has reserved for ongoing operations and maintenance
expenses (“O&M”) at the site. This O&M is required
120 Notes to Consolidated Financial Statements
Environmental
remediation Restructuring Warranty
Project
costs
Partial
retirement Other Total
Balance at January 1, 2009 13,860 3,589 9,291 4,307 1,211 2,928 35,186
Discontinued operations in opening (a) (4,805) (1,673) – – – – (6,478)
Provisions made during the period 3,998 7,782 6,462 2,256 397 440 21,335
Provisions used during the period (1,352) (2,971) (567) (1,458) (585) (1,420) (8,353)
Increase due to discounting 1,923 – – – – – 1,923
Currency and reversals 284 (1,611) (1,529) (1,541) 29 (1,297) (5,665)
Balance at December 31, 2009 13,908 5,116 13,657 3,564 1,052 651 37,948
Balance at January 1, 2010 13,908 5,116 13,657 3,564 1,052 651 37,948
Provisions made during the period 6,421 423 5,869 4,022 1,421 283 18,439
Provisions used during the period (664) (3,950) (1,421) (1,238) (1,745) (337) (9,355)
Decrease due to discounting (671) – – – – – (671)
Currency, transfers and reversals 1,088 (283) (5,902) (1,425) 1,537 (65) (5,050)
Balance at December 31, 2010 20,082 1,306 12,203 4,923 2,265 532 41,311
Non-current 13,641 401 – – 522 298 14,862
Current 267 4,715 13,657 3,564 530 353 23,086
Balance at December 31, 2009 13,908 5,116 13,657 3,564 1,052 651 37,948
Non-current 18,415 693 – – 1,288 211 20,607
Current 1,667 613 12,203 4,923 977 321 20,704
Balance at December 31, 2010 20,082 1,306 12,203 4,923 2,265 532 41,311
(a) See Note 6 for detail of discontinued operations.
to be provided for 1,000 years and is expected to cost
$44,700 on an undiscounted basis. Other environmental
items requiring provision include: wetlands remediation,
stormwater remediation and maintenance. These projects
are expected to create cash outflows of $695, on an
undiscounted basis, and are expected to be completed
within the next 15 years.
Newfield, NJ USA
Another one of the Company’s US subsidiaries has entered
into administrative consent orders with the New Jersey
Department of Environmental Protection (“NJDEP”)
under which the US subsidiary must conduct remediation
activities at the Newfield facility. Since the initial
administrative consent order was signed in 1997, many
of the obligations have been completed.
In January 2006, the US subsidiary entered into a fixed
price remediation contract with TRC Companies Inc.
(“TRC”), whereby TRC assumes primary responsibility
for all non-radiological groundwater environmental
remediation obligations at the Newfield facility, with
certain exceptions for one contaminant, perchlorate. The
initiation of this remediation contract also led to a new
Administrative Consent Order (“ACO”) that was signed in
February 2006. This ACO specifically designated TRC as
the entity primarily responsible for the non-radiological
contamination and also specifically cited the US subsidiary